Scott faces hard call on KKR offer

Peter Scott
has not yet taken the chairman’s seat at Perpetual but he is already at the centre of a takeover battle between the funds manager and buy-out giant Kohlberg Kravis Roberts & Co.

Mr Scott has decades of senior management experience in publicly listed companies and this will be put to the test when he formally takes over as chairman at Tuesday’s annual general meeting.

By any measure the 125-year-old company is at a historic turning point that will lead to major changes in leadership and possibly its structure and ownership.

Even before the announcement of the $1.75 billion offer by KKR there had been eager anticipation over the meeting because of Mr Scott’s succession and the search for a chief executive officer to replace
David Deverall
.

But the original agenda has been scrapped and Mr Scott has joined a small team of advisers and directors in the Sydney headquarters to number crunch, analyse and debate the merits of KKR’s offer.

There’s no guarantee Mr Scott, 56, will have an answer when asked the inevitable question by shareholders about whether the deal is acceptable or whether some other strategy is being considered. At worst, shareholders may only get a preliminary response to the offer and broad guidance on 2011 first-half profits.

KKR has carefully timed its move to turn the screws on a senior management group still coming to terms with changes in the CEO and chairman, a languishing share price, lacklustre fund flows and unanswered questions on strategy.

“Peter is facing a hard call," a former Perpetual colleague who did not want to be named said.

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Any decision to rebuke the offer would have to be justified by a convincing business plan and confidence that a resurgent stockmarket would buoy its share price. Alternatively, some analysts and fund managers believe Mr Scott could be seeking an alternative bidder as a “white knight" to introduce bidding tension.

Mr Scott’s career has taken some unusual twists since he graduated from Victoria’s Monash University as a civil engineer, specialising in hydrology and water services, and joining an engineering company.

He climbed the management ranks at Lend Lease before becoming CEO of its funds management group, MLC.

In 2000 the fund manager, which had about $80 billion in assets and some 6000 staff, was acquired by National Australia Bank for $4.56 billion, then one of Australia’s biggest takeovers.

Mr Scott stayed on for another five years as CEO of MLC and head of NAB’s wealth management division, helping to integrate the cultures before resigning to take on directorships, such as Stockland and Perpetual.

Mr Scott’s former colleagues said he remained open and accessible with “very strong people management skills".

“Peter’s well known in the financial services industry and highly regarded by those people who have worked with him," a former colleague who did not want to be named said.

“He is very bright and a good people person."

In addition to being on Perpetual’s board, Mr Scott also serves on the remuneration, investment and nominations committees.

“Perpetual can bring people with investment banking skills in from outside," another former colleague said. “But Peter’s job will be using his ability to manage various people and get on with them."

Critical to any defence will be his ability to lock in senior employees, typically leading fund managers John Sevior and Matt Williams, who appear to hold between 6 and 10 per cent of the company’s shares.

Under the scheme of arrangement the deal would have to be approved by the board and 75 per cent of shareholders.